Is Ukraine a Prize Only Russia Wants to Win?

Russia versus the West is more than a mismatch. From an economic perspective, Russia’s economy is only about an eighth the size of America’s, and also an eighth the size of the EU’s. Taking on a group of adversaries that together are 16 times richer than you is hardly a wise gamble. But Russian President Putin is taking it.

Why does he think he can challenge the Europe and the U.S. on Ukraine and apparently win?

OK, there’s energy at stake. We’ve all heard that Europe is dependent on Russian for natural gas and oil. But is it really? And when is dependency a two-way street? Russia supplies Europe with about a third of its fuel. Looked at from the other side, Europe buys about 70 percent of Russia’s energy. One would think a customer that buys 70 percent of what you make is a pretty important customer. That’s especially true when that customer’s purchases account for 20 percent or so of your GDP, and nearly all of your governmental expenditures. So who exactly is dependent on whom?

Cut the energy pipeline between Russia and Europe and Europe’s massive economy will no doubt slow, perhaps precipitously. But Europe will be able to replace its imports of oil and natural gas a lot faster than Russia replaces the money it earns selling to Europe. The U.S., which recently surpassed Russia as the world’s largest energy producer, can provide Europe with oil and perhaps some natural gas. Norway can provide natural gas, and so can Australia, Canada, Saudi Arabia, and Qatar. If Russia stopped selling energy to the EU, the continent would stumble, but Russia would surely fall.

Here’s another angle on the mismatch: the countries’ sizes. Russia has 143 million people living within its borders while the EU has 500 million and the US has 310 million, meaning Russia is outnumbered again. And what if Russia did take the Ukraine – all of it? That would add 45 million people to the Russian side, but it would also add roughly $20 billion in external debt.

Then there’s the military mismatch. Russia has fewer soldiers than the U.S. military, and many fewer than NATO. And, whereas the U.S. spends roughly $650 billion a year on its fighting forces, Russia spends just $90 billion, a fraction of that amount.

So how can a country like Russia, which is so much smaller than the West on every measure, challenge Europe and the U.S. on Ukraine and apparently win? Is it fatigue on the part of the West? Fear of fighting? Is it choosing prudence over risk?

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